11th Circuit Holds Relevant Conduct Loss for Guideline Calculation Can Be Less Than Loss Within Scope of Criminal Conspiracy (2/27/19)

In United States v. Anor, 2019 U.S. App. LEXIS 4858 (11th Cir. 2019), here, Anor was a relatively low level employee in a tax preparation office which prepared and filed hundreds of false and fraudulent tax returns.  She pled guilty to conspiracy to conspiracy to commit wire fraud, in violation of 18 U.S.C. §§ 1343 and 1349.  In calculating the loss for Sentencing Guidelines purposes, the district court included all the losses related to conspiracy -- being all the losses involved.  The Court of Appeals reversed because the Guidelines' discussion of relevant conduct would be less than the losses within the scope of the criminal conspiracy.  Here is the discussion:

However, "[t]he limits of sentencing accountability are not coextensive with the scope of criminal liability." United States v. Hunter, 323 F.3d 1314, 1319 (11th Cir. 2003). Under the guidelines, liability for the reasonably foreseeable acts of others is limited by the scope of the criminal activity the defendant agreed to jointly undertake. See U.S.S.G. § 1B1.3, cmt. n.2. Therefore, "to determine a defendant's liability for the acts of others, the district court must first make individualized findings concerning the scope of criminal activity undertaken by a particular defendant." Hunter, 323 F.3d at 1319 (quotation marks omitted). "In determining the scope of the criminal activity, the district court may consider any explicit agreement or implicit agreement fairly inferred from the conduct of the defendant and others." United States v. Petrie, 302 F.3d 1280, 1290 (11th Cir. 2002). Once that individualized finding is made, the court can proceed to determine reasonable foreseeability. Hunter, 323 F.3d at 1319. 

Our decision in Hunter illustrates the limits of sentencing accountability for low-level defendants who are convicted of participating in a broader conspiracy. The defendants in Hunter were participants in a counterfeit corporate check-cashing ring that operated in South Florida. Id. at 1316. The ring was composed of three "levels" of participants—two individuals at the top who were responsible for printing the counterfeit checks; three individuals who were responsible for recruiting and occasionally driving the check-cashers (called "runners") to cash the checks; and, at the bottom, nineteen runners. Id. At sentencing, the district court held the three defendants, who were runners, responsible for the total loss of the entire conspiracy, stating that the losses associated with the broader conspiracy were reasonably foreseeable to them. Id. at 1318. 

On appeal, we held that reasonable foreseeability alone was not enough and that the district court erred by failing to "first determine the scope of the criminal activity [the defendants] agreed to jointly undertake." Id. at 1320 (quotation marks omitted). We explained that "the Guidelines establish that the fact that the defendant knows about the larger operation, and has agreed to perform a particular act, does not amount to acquiescence in the acts of the criminal enterprise as a whole." Id. Thus, the fact that the defendants cashed multiple checks, which made them responsible for those checks, did not "automatically" or "necessarily" support a finding that they knew the scale of the conspiracy, "let alone that [they] agreed to the full extent of that criminal activity." Id. at 1320-21. Similarly, the mere fact that one of the defendants identified other runners working for a mid-level operative was "not enough to make her accountable for their conduct" without some other evidence "from which an agreement can be inferred." Id. at 1320. Cautioning that the defendants' "involvement and agreement in the conspiracy may be limited to the checks each actually cashed," we vacated the application of a loss enhancement and remanded for the court to make individualized findings as to the scope of criminal activity each defendant agreed to undertake. Id. at 1322. 

Hunter further elaborated on the types of evidence showing agreement in a larger criminal scheme. See id. at 1321-22. One "relevant factor in determining whether an activity is jointly undertaken is whether the defendant assisted in designing and executing the scheme." Id. at 1321; cf. United States v. McCrimmon, 362 F.3d 725, 732-33 (11th Cir. 2004) (holding a defendant responsible for the entire amount of loss where the defendant, though he did not "design" the scheme, actively recruited investors to further the scheme and had a role equivalent to a higher-level operative). Another is "evidence of sharing or mutuality from which an agreement in the larger criminal scheme can be inferred." Hunter, 323 F.3d at 1322. For example, in United States v. Hall, we affirmed a court's determination that the defendant's relevant conduct included fraud losses caused by others in a telemarketing-type conspiracy where each of the participants knew each other and was aware of the others' activities, and they aided and abetted one another by sharing lead sheets of potential victims and sharing telephones. 996 F.2d 284, 285-86 (11th Cir. 1993).

Here, we vacate and remand because the district court failed to "first determine the scope of the criminal activity [Anor] agreed to jointly undertake." Hunter, 323 F.3d at 1320. While the court recognized the need to make a finding as to the scope of criminal activity to which Anor agreed, we cannot tell from the sentencing transcript that the court actually did so. Rather, the court's determination that Anor was responsible for all tax returns filed by Tax King's West Palm Beach office appears to have been based on reasonable foreseeability—that is, her knowledge that she was participating in a broader conspiracy. 

However, as Hunter states, "the fact that the defendant knows about the larger operation, and has agreed to perform a particular act, does not amount to acquiescence in the acts of the criminal enterprise as a whole." Id. The record clearly reflects that Anor agreed to and is responsible for the false tax returns she herself prepared. But her accountability for those returns, like the runners' accountability for the checks they cashed in Hunter, "does not necessarily suggest that [Anor] knew the scale of the conspiracy of which she was a part, let alone that she agreed to the full extent of that criminal activity." Id. at 1321. 

Likewise, the fact that Anor knew that Pearson had "a lot" of other clients is not enough to make her accountable for the tax returns filed on behalf of those clients, absent some conduct from which an agreement can be inferred with respect to them. See id. The government does not suggest that Anor took any action with respect to tax returns she herself did not prepare. Nor does the record indicate that Anor received any of the profits from the broader scheme or that she was involved in recruiting additional clients to further the scheme, like the defendant in McCrimmon. Rather, the record reflects that she was hired by Pearson to do a discrete job, and that job was but a part of the overall conspiracy. 

The government also notes that Anor knew that other tax preparers worked for Pearson, but, as in Hunter, "the mere fact that [Anor] identified other [tax preparers] working for [Pearson] is not enough to make her accountable for their conduct, unless the Government can point to some other conduct from which an agreement can be inferred." Id. at 1320. And we do not see anything in the PSR to suggest that Anor interacted with these other tax preparers. For instance, there is no "evidence of sharing or mutuality" with the other tax preparers, like there was with the participants of the fraud scheme in Hall. See id. at 1322. 

In sum, the record establishes that Anor agreed to prepare certain tax returns containing false information for Pearson, and also knew or should have known that there was a broader conspiracy. But, under Hunter and the guidelines, these facts alone are not enough to show that she agreed to or acquiesced in the acts of the criminal enterprise as a whole. See id. at 1320. 

Because the district court did not make a particularized finding regarding the scope of Anor's agreement, as required by U.S.S.G. § 1B1.3(a)(1)(B), we vacate Anor's sentence and remand for resentencing.